[go: up one dir, main page]

IDEAS home Printed from https://ideas.repec.org/p/ess/wpaper/id286.html
   My bibliography  Save this paper

Who’s Going Broke? Comparing Growth in Healthcare Costs in Ten OECD Countries

Author

Listed:
  • Laurence J. Kotlikoff
Abstract
Government healthcare expenditures have been growing much more rapidly than GDP in OECD countries. For example, between 1970 and 2002 these expenditures grew 2.3 times faster than GDP in the U.S., 2.0 times faster than GDP in Germany, and 1.4 times faster than GDP in Japan. How much of government healthcare expenditure growth is due to demographic change and how much is due to increases in benefit levels; i.e., in healthcare expenditures per beneficiary at a given age? This paper answers this question for ten OECD countries -- Australia, Austria, Canada, Germany, Japan, Norway, Spain, Sweden, the UK, and the U.S. Specifically, the paper decomposes the 1970-2002 growth in each countrys healthcare expenditures into growth in benefit levels and changes in demographics.Although healthcare spending is growing at unsustainable rates in most, if not all, OECD countries, the U.S. appears least able to control its benefit growth due to the nature of its fee-forservice healthcare payment system. Consequently, the U.S. may well be in the worst long-term fiscal shape of any OECD country even though it is now and will remain very young compared to the majority of its fellow OECD members.

Suggested Citation

  • Laurence J. Kotlikoff, 2005. "Who’s Going Broke? Comparing Growth in Healthcare Costs in Ten OECD Countries," Working Papers id:286, eSocialSciences.
  • Handle: RePEc:ess:wpaper:id:286
    as

    Download full text from publisher

    File URL: http://www.eSocialSciences.com/data/articles/Document116122005580.8958856.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. C. David Naylor, 1992. "The Canadian health care system: A model for America to emulate?," Health Economics, John Wiley & Sons, Ltd., vol. 1(1), pages 19-37, April.
    2. Sally C. Stearns & Edward C. Norton, 2004. "Time to include time to death? The future of health care expenditure predictions," Health Economics, John Wiley & Sons, Ltd., vol. 13(4), pages 315-327, April.
    3. Breyer Friedrich & Ulrich Volker, 2000. "Gesundheitsausgaben, Alter und medizinischer Fortschritt: Eine Regressionsanalyse / Ageing, Medical Progress and Health Care Expenditures: A Regression Analysis," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 220(1), pages 1-17, February.
    4. Peter Zweifel & Stefan Felder & Andreas Werblow, 2004. "Population Ageing and Health Care Expenditure: New Evidence on the “Red Herring”," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 29(4), pages 652-666, October.
    5. Tim Miller, 2001. "Increasing longevity and medicare expenditures," Demography, Springer;Population Association of America (PAA), vol. 38(2), pages 215-226, May.
    6. Peter Zweifel & Stefan Felder & Markus Meiers, 1999. "Ageing of population and health care expenditure: a red herring?," Health Economics, John Wiley & Sons, Ltd., vol. 8(6), pages 485-496, September.
    7. Benz, Ulrich & Fetzer, Stefan, 2004. "Indicators for Measuring Fiscal Sustainability: A Comparative Application of the OECD-Method and Generational Accounting," Discussion Papers 118, Albert-Ludwigs-Universität Freiburg, Institut für Finanzwissenschaft.
    8. Hansen, Paul & King, Alan, 1996. "The determinants of health care expenditure: A cointegration approach," Journal of Health Economics, Elsevier, vol. 15(1), pages 127-137, February.
    9. Florian Buchner & Jürgen Wasem, 2006. "“Steeping” of Health Expenditure Profiles," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 31(4), pages 581-599, October.
    10. Peter Zweifel, 2003. "Medical Innovation: A Challenge to Society and Insurance," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 28(2), pages 194-202, April.
    11. Breyer, Friedrich & Felder, Stefan, 2006. "Life expectancy and health care expenditures: A new calculation for Germany using the costs of dying," Health Policy, Elsevier, vol. 75(2), pages 178-186, January.
    12. Joseph P. Newhouse, 1992. "Medical Care Costs: How Much Welfare Loss?," Journal of Economic Perspectives, American Economic Association, vol. 6(3), pages 3-21, Summer.
    13. Jennifer Roberts, 1999. "Sensitivity of elasticity estimates for OECD health care spending: analysis of a dynamic heterogeneous data field," Health Economics, John Wiley & Sons, Ltd., vol. 8(5), pages 459-472, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bernal-Delgado, Enrique & Comendeiro-Maaløe, Micaela & Ridao-López, Manuel & Sansó Rosselló, Andreu, 2020. "Factors underlying the growth of hospital expenditure in Spain in a period of unexpected economic shocks: A dynamic analysis on administrative data," Health Policy, Elsevier, vol. 124(4), pages 389-396.
    2. Andreea Claudia ȘERBAN & Mirela Ionela ACELEANU, 2015. "Current Demographic Trends – A New Challenge for the Labour Market," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(4(605), W), pages 309-320, Winter.
    3. Tetiana Zatonatska & Olena Liashenko & Yana Fareniuk & Oleksandr Dluhopolskyi & Artur Dmowski & Marzena Cichorzewska, 2022. "The Migration Influence on the Forecasting of Health Care Budget Expenditures in the Direction of Sustainability: Case of Ukraine," Sustainability, MDPI, vol. 14(21), pages 1-17, November.
    4. Dollevoet, Twan & van Essen, J. Theresia & Glorie, Kristiaan M., 2018. "Solution methods for the tray optimization problem," European Journal of Operational Research, Elsevier, vol. 271(3), pages 1070-1084.
    5. Valeska Hofbauer-Milan & Stefan Fetzer & Christian Hagist, 2023. "How to Predict Drug Expenditure: A Markov Model Approach with Risk Classes," PharmacoEconomics, Springer, vol. 41(5), pages 561-572, May.
    6. Max Groneck & Christoph Kaufmann, 2017. "Determinants of Relative Sectoral Prices: The Role of Demographic Change," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 79(3), pages 319-347, June.
    7. Stefan Fetzer & Stefan Moog, 2021. "Indicators for Measuring Intergenerational Fairness of Social Security Systems—The Case of the German Social Health Insurance," Sustainability, MDPI, vol. 13(10), pages 1-18, May.
    8. repec:agr:journl:v:4(605):y:2015:i:4(605):p:309-320 is not listed on IDEAS
    9. Francesco Paolucci & Ken Redekop & Ayman Fouda & Gianluca Fiorentini, 2017. "Decision Making and Priority Setting: The Evolving Path Towards Universal Health Coverage," Applied Health Economics and Health Policy, Springer, vol. 15(6), pages 697-706, December.
    10. Vaittinen, Risto & Vanne, Reijo, 2020. "Finland’s slow recovery from the financial crisis: A demographic explanation," The Journal of the Economics of Ageing, Elsevier, vol. 17(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Christian Hagist & Laurence Kotlikoff, 2005. "Who's Going Broke? Comparing Growth in Healthcare Costs in Ten OECD Countries," NBER Working Papers 11833, National Bureau of Economic Research, Inc.
    2. Christian Hagist & Laurence J. Kotlikoff, 2009. "Who’s going broke? Comparing growth in Public healthcare expenditure in Ten OECD Countries," Hacienda Pública Española / Review of Public Economics, IEF, vol. 188(1), pages 55-72, March.
    3. Friedrich Breyer & Normann Lorenz, 2021. "The “red herring” after 20 years: ageing and health care expenditures," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 22(5), pages 661-667, July.
    4. Ried, Walter, 2007. "On the relationship between aging, edical progress and age-specific health care expenditures," Wirtschaftswissenschaftliche Diskussionspapiere 08/2007, University of Greifswald, Faculty of Law and Economics.
    5. Fredrik Gregersen, 2014. "The impact of ageing on health care expenditures: a study of steepening," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 15(9), pages 979-989, December.
    6. Melberg, Hans Olav & Sørensen, Jan, 2013. "How does end of life costs and increases in life expectancy affect projections of future hospital spending?," HERO Online Working Paper Series 2013:9, University of Oslo, Health Economics Research Programme.
    7. Breyer, Friedrich & Felder, Stefan, 2006. "Life expectancy and health care expenditures: A new calculation for Germany using the costs of dying," Health Policy, Elsevier, vol. 75(2), pages 178-186, January.
    8. Baoping Shang & Dana Goldman, 2008. "Does age or life expectancy better predict health care expenditures?," Health Economics, John Wiley & Sons, Ltd., vol. 17(4), pages 487-501, April.
    9. Breyer Friedrich, 2015. "Demographischer Wandel und Gesundheitsausgaben: Theorie, Empirie und Politikimplikationen," Perspektiven der Wirtschaftspolitik, De Gruyter, vol. 16(3), pages 215-230, October.
    10. Ried, Walter, 2006. "Gesundheitsausgaben für Überlebende und Verstorbene im demographischen Wandel: der Einfluss des medizinischen Fortschritts," Wirtschaftswissenschaftliche Diskussionspapiere 10/2006, University of Greifswald, Faculty of Law and Economics.
    11. Colombier, Carsten & Weber, Werner, 2009. "Projecting health-care expenditure for Switzerland: further evidence against the 'red-herring' hypothesis," MPRA Paper 26747, University Library of Munich, Germany, revised Nov 2009.
    12. Fabio Pammolli & Francesco Porcelli & Francesco Vidoli & Monica Auteri & Guido Borà, 2017. "La spesa sanitaria delle Regioni in Italia - Saniregio2017," Working Papers CERM 01-2017, Competitività, Regole, Mercati (CERM).
    13. Felipa de Mello-Sampayo & Sofia de Sousa-Vale, 2014. "Financing Health Care Expenditure in the OECD Countries: Evidence from a Heterogeneous, Cross-Sectional Dependent Panel," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 61(2), pages 207-225, March.
    14. Friedrich Breyer & Normann Lorenz & Thomas Niebel, 2015. "Health care expenditures and longevity: is there a Eubie Blake effect?," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 16(1), pages 95-112, January.
    15. Stefan Felder, 2006. "Lebenserwartung, medizinischer Fortschritt und Gesundheitsausgaben: Theorie und Empirie," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 7(s1), pages 49-73, May.
    16. Ried Walter, 2007. "Medizinisch-technischer Fortschritt und altersspezifische Gesundheitsausgaben / Medical Progress and Age-specific Expenditure on Health Care," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 227(5-6), pages 636-659, October.
    17. Felipa de Mello-Sampayo & Sofia de Sousa-Vale, 2014. "Financing Health Care Expenditure in the OECD Countries: Evidence from a Heterogeneous, Cross-Sectional Dependent Panel," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 61(2), pages 207-225.
    18. Isabel Casas & Jiti Gao & Bin Peng & Shangyu Xie, 2021. "Time‐varying income elasticities of healthcare expenditure for the OECD and Eurozone," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 36(3), pages 328-345, April.
    19. Hartwig, Jochen, 2008. "What drives health care expenditure?--Baumol's model of 'unbalanced growth' revisited," Journal of Health Economics, Elsevier, vol. 27(3), pages 603-623, May.
    20. Hagist, Christian & Klusen, Norbert & Plate, Andreas & Raffelhüschen, Bernd, 2005. "Social health insurance: The major driver of unsustainable fiscal policy?," FZG Discussion Papers 1, University of Freiburg, Research Center for Generational Contracts (FZG).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ess:wpaper:id:286. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Padma Prakash (email available below). General contact details of provider: http://www.esocialsciences.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.